Dollars and Sense: Greater Economic Security for Family Caregivers

By The National Academies of Sciences, Engineering, and Medicine

At least 17.7 million Americans are family caregivers of someone age 65 or older – unpaid work that, with the rapid “graying of America,” has become increasingly commonplace. While many caregivers find deep personal satisfaction in such work, they also experience higher levels of anxiety and stress, resulting from the physical, emotional, and economic burdens caregiving puts on their own lives.

In “Families Caring for an Aging America,” a report published in September, the prestigious National Academies of Sciences, Engineering, and Medicine, took a comprehensive look at “the overlooked challenges facing the aging U.S. population, their families, and society.” Their conclusion: “Family caregivers need greater recognition, information, and support to fulfill their roles and responsibilities and to maintain their own health, financial security, and well-being.” They urge the Presidential Administration that will take office next January to create a “National Family Caregiver Strategy” involving both the public and private sectors. One of its key elements, excerpted below, would address ways to ease the financial drain of family caregiving.

Explore, evaluate, and, as warranted, adopt federal policies that provide economic support for working caregivers.

Caregiving and employment are increasingly intertwined. Already, about half of the nation’s caregivers of older adults are employed….Working caregivers – especially those who care for people with dementia or with substantial personal needs – are at risk of significant economic costs: loss of income; out-of-pocket cost for the care recipient; and lower lifetime earnings, savings, and retirement benefits. Low-wage and part-time workers are particularly vulnerable. Job discrimination may also affect caregivers’ job security.

The Family and Medical Leave Act (FMLA) in 1993 was an important step toward providing working caregivers some help in balancing job and family responsibilities. However, the FMLA covers only certain family relationships, excluding daughters- and sons-in-law, grandchildren, nieces and nephews, siblings and other friends and relatives who are caring for older adults; and it does not apply to employers with fewer than 50 employees. Perhaps even more important, eligible caregivers may be unable to afford the unpaid leave FMLA protects, and many American workers, especially low-wage workers, lack access to paid time off of any kind.

Four states – California, New Jersey, New York, and Rhode Island – have enacted paid family leave statutes and five states – California, Connecticut, Massachusetts, Oregon, and Vermont – have paid sick leave days to care for an ill family member (including some older adults). The states finance paid family leave through an insurance model that relies on minimal payroll taxes paid by employees. Although some employers report additional costs, initial evidence suggests that many have adapted to family leave requirements. These programs have the potential both to facilitate family caregiving and alleviate some of its economic hardships.

Other policy measures have the potential to help safeguard caregivers’ immediate and long-term economic security. An array of worthy proposals merits serious consideration. These include, for example: refundable tax credits to increase caregiver incomes; Social Security caregiving credits to reduce the impact of foregone wages on retirement benefits; including family caregiver status as a protected class under federal employment discrimination laws; and providing employers with guidance and training on best practices to better support workers with caregiving responsibilities.

Exploring the feasibility of these options will require economic impact assessments that include not only the caregiver but also employers and federal and state agencies. Evaluating feasibility will also require that analyses take into account unintended consequences, such as the impact on caregivers’ labor force participation.

As reliance on working caregivers grows, federal policy actions across some or all of these lines is essential to promote economic security for all the nation’s caregivers of older Americans. Federal, state, and local governments should accelerate efforts to expand and evaluate paid family and medical leave and paid sick leave policies.

For more than 150 years, the private, nonprofit National Academies of Sciences, Engineering, and Medicine have provided expert advice on some of the most pressing challenges facing the nation and the world and helped shape public policy and inform public opinion. More information about “Families Caring for an Aging America” is available at nationalacademies.org.